Cairn Energy’s finance director, Kevin Hart, is facing the unenviable task of seeing the oil and gas exploration and production company slip back into the FTSE250, only months after it rose to the heady heights of the UK’s top 100 businesses.
Cairn, last year’s best performing FTSE100 player, is set to drop out of the blue chip index tomorrow at the FTSE’s first quarterly review of 2005 and be replaced by plasterboard manufacturer BPB. As the company is currently capitalised at £1.01bn and ranked 113th, its demotion to the mid-cap FTSE250 index is assured.
Hart steered the business to the financial elite in September last year after it struck oil five times in Rajasthan, western India. Cairn’s rise to the FTSE100 was as meteoric as its downfall: its shares rose 171% in 2004, more than doubling the next best performer, steel manufacturer Corus.
However, it seems that last December’s set backs including a tax dispute with the Indian government and a disappointing drilling update that wiped £393m off its market value in a single day, has left Cairn facing the drop to the lower ranks of the FTSE indices.
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